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     rederob
Member
Username: rederob
Post Number: 1296
Registered: 10-2002Rating: N/A
Votes: 0
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| | Wednesday, August 31, 2005 - 12:58 pm: |  
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your holiness HC
I think that you are mostly on the right track.
Forbes' chance of being right within 12 months are possible if there is a global economic slowdown, otherwise we might see a price collapse to nearer $50 - which today seems crazy as a year ago it would have been an optimist's dream.
The other part of the answer to high crude oil prices is based in the different quality of crude output from suppliers.
While there is adequate crude available to the market, competition is fierce for the lightest crude grades which are most easily cracked and deliver both higher daily volumes and greater refiner margins.
What OPEC (via Saudi Arabia) is offering up to meet the demand side of the equation is "sour" crude and I doubt if any US refineries could actually handle it without significant refinery modification.
So the commercials must shop around for the best available crude oils for their refineries, and the hedge funds are playing the speculative game for all it's worth.
In the present case of Katrina's affect in the Gulf of Mexico, we have an interesting example of the supply/demand/refinery issue.
Here we have an example of refineries relying on daily crude being literally "piped" in, with little available crude reserves as backup. So for the refineries to continue to operate, they will likely need a release of crude from the Strategic Petroleum Reserve, by Presidential order - about 5 million barrels were released last year to mitigate the affects of hurricane Ivan.
At this stage there is not enough information to determine more precisely Katrina's impact on US refined output, but WTIC at almost $70/bbl gives a clue that things are not rosy.
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holycow
Member
Username: holycow
Post Number: 1653
Registered: 08-2004Rating: N/A
Votes: 0
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| | Wednesday, August 31, 2005 - 01:34 pm: |
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Whoa! Rederob,
... what has overcome you this morning?
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HC
"... if you've got a chart, I have an opinion!"
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holycow
Member
Username: holycow
Post Number: 1654
Registered: 08-2004Rating: N/A
Votes: 0
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| | Wednesday, August 31, 2005 - 02:01 pm: |
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BHP Billiton CEO expects oil to fall
August 31, 2005 - 12:24PM
BHP Billiton Ltd chief executive Chip Goodyear has said the price of crude oil could fall up to $US20 per barrel in the next 12 months.
When asked to estimate the price of oil per barrel in 12 months time, Mr Goodyear said: "I think you are looking at a range of probably $US40-$US50 (per barrel)".
Mr Goodyear was speaking at the Forbes Global CEO Conference in Sydney.
Crude oil for October delivery settled up $US2.61 at $US69.81 per barrel on the New York Mercantile Exchange after hitting a fresh record high of $US70.85.
*** is Chip being polite or he's just trying to blend in? If I remember it right a couple of days ago I read about the tale of Chicken Licken and the sky is not falling down, opportunity abound for those who have faith, etc etc and blah blah blah...
It only takes two days (1,2), may be three (1,2,3), for a doyen of the industry to change his view, I think it's a rather chip shot.
Anyway, now that there seems to be a change in the wind direction, and oil might/may/may be not/will/should/shall/"again depends on the wind", and the semi conventional wisdom now is telling everyone there may be $US20 in every barrel if you bother to put your hand to find it... what's gonna happen to WPL, OSH, ARQ, BHP and all the other highly hyped stocks?
Are they gonna fall like the apple that fell on Newton's head that provided the clue of gravitation to him?
Hmmmm....
HC
"... if you've got a chart, I have an opinion!"
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cjb
Member
Username: cjb
Post Number: 64
Registered: 02-2003Rating: N/A
Votes: 0
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| | Wednesday, August 31, 2005 - 04:21 pm: |
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His statement is almost meaningless. Anything could happen. They always talk in generalities. It would be more informative to tell us why the price is where it is and what will lead to its decline.
CB
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rederob
Member
Username: rederob
Post Number: 1298
Registered: 10-2002Rating: N/A
Votes: 0
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| | Wednesday, August 31, 2005 - 06:19 pm: |
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cjb
while the demand equation is driving the prices higher, the prices will go higher
when that equation equivocates, the funds could drop their bundle and a $20 fall in oil would not be beyond the realms of possibility
what we know for sure is that the US is not building any more refineries (modifications to existing ones, yes) and US oil consumption continues to increase each year
so we can deduce that the US side of demand will hold up OK for some time
the question then turns to what amount of refined production will the US source from overseas in future?
i have no clues
next we need to look outside of USA
at the moment there are signs that global industrial production is on the rise, so we can deduce that overseas demand for oil over the next 12 months should be strong
this view was recently supported by the IEA
the next question is about non-US refining capacity - how much is being added?
if someone has access to some high-priced reports they might be able to answer that one
all i know is that it takes years to get refineries up and running, so if work is not in the pipeline now, we might find global refined output a tight squeeze
although i clearly favour the upside argument, it would be stupid to discount a turnaround in global economies that could lead to oil tanking
Forbes may have set some tongues wagging, but he is simply speculating on an oil scenario that does not and may not exist in 12 months, or possibly ever again if we are now in peak oil
and i know i rabbit on about peak oil, but for those that understand the concept, you will then understand why i keep mentioning it
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ingot54
Member
Username: ingot54
Post Number: 696
Registered: 05-2004Rating: N/A
Votes: 0
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| | Thursday, September 01, 2005 - 01:12 am: |
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US TO RELEASE OIL FROM STRATEGIC RESERVE
The United States will release oil from its Strategic Petroleum Reserve to help refineries whose operations have been badly hit by Hurricane Katrina, Energy Secretary Samuel Bodman said today.
Mr Bodman told MSNBC television that the White House made the decision late on Tuesday and that an official announcement would be made later Wednesday.
He said a request was made on Tuesday. "We worked through it and it was approved," the official said.
The United States keeps about 700 million barrels of oil stored in underground caverns on the Texas and Louisiana coast to cushion oil markets during energy disruptions.
According to US government data, Katrina shut down an estimated 95 per cent of crude production and 88 per cent of natural gas output in the Gulf of Mexico - which accounts for a quarter of total US oil output.
Some 735 oil and natural gas rigs and platforms remained evacuated, according to the federal Minerals Management Service.
Keep Smiling
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holycow
Member
Username: holycow
Post Number: 1674
Registered: 08-2004Rating: N/A
Votes: 0
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| | Friday, September 02, 2005 - 05:50 pm: |
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http://www.theaustralian.news.com.au/printpage/0,5942,16461152,00.html
Chinese oil firm on the prowl
Enid Tsui and Francesco Guerrera, Hong Kong
02sep05
PETROCHINA, the country's biggest oil company, has heightened speculation about further cross-border acquisitions by raising up to $HK21 billion ($3.57 billion) through an international share placement.
The move surprised some analysts and investors as PetroChina, whose parent last week bought PetroKaz for $US4.18 billion ($5.54 billion), has built a strong cash position in the past year. But the placement of the shares underlines PetroChina's desire for cross-border acquisitions.
Some analysts believe the company has a critical window of opportunity to pursue foreign assets...
*** let's put our thinking cap on..., if I were to be them, I won't try the USA again. And there's not much opportunity in the Euroland either. They had also "scored" one in Central Asia,... now tell me, which continent they have yet prowled on and has the right mix of resources, technology and knowhow that they want badly?
Huh?... I can't hear you!!
HC
"... if you've got a chart, I have an opinion!"
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ingot54
Member
Username: ingot54
Post Number: 717
Registered: 05-2004Rating: N/A
Votes: 0
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| | Friday, September 02, 2005 - 06:11 pm: |
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? Tasmania?
Keep Smiling
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holycow
Member
Username: holycow
Post Number: 1676
Registered: 08-2004Rating: N/A
Votes: 0
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| | Friday, September 02, 2005 - 06:25 pm: |
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Crude Future... just a thought, Katrina's damage to the USA oil facility I believe is the "worst" case scenario and yet I don't see the future crude goes much higher than US$70+-1%, with this observation I am thinking out loud what's the chance of it going higher? My bet is short term and until something worst comes along, US$70 is all the speculators are going to get. Can't see how it can reach for example US$100...
HC
"... if you've got a chart, I have an opinion!"
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holycow
Member
Username: holycow
Post Number: 1677
Registered: 08-2004Rating: N/A
Votes: 0
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| | Friday, September 02, 2005 - 06:38 pm: |
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Ingot,
Tasmania is not a continent yet, but Australia is. I reckon there is a high chance they are coming over this way.
Cheers.
HC
"... if you've got a chart, I have an opinion!"
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ingot54
Member
Username: ingot54
Post Number: 719
Registered: 05-2004Rating: N/A
Votes: 0
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| | Friday, September 02, 2005 - 06:38 pm: |
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HC - just a view ...
The very fact that the speculators have not swooped and boosted the price through to about $85 by now is a pointer ... perhaps?
Given that 25% of USA crude either comes through the affected area, or is produced there, one wonders why it has gone so quiet.
Perhaps the speculators have been taken out of the equation by the storm. With 25% of the supply to play with, that gives these speculators good reason to play ... or used to.
Consider a scenario where they now have to liquify their positions, to fund a rebuild of infrastructure ... what might that do to the price?
Could it be that it might just drop back a notch ot two?
Keep Smiling
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holycow
Member
Username: holycow
Post Number: 1679
Registered: 08-2004Rating: N/A
Votes: 0
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| | Friday, September 02, 2005 - 06:50 pm: |
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Oil Price History and Analysis... here is a good place to learn more about oil if you are curious.
HC
"... if you've got a chart, I have an opinion!"
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rederob
Member
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